Galaxy Digital, a cryptocurrency financial services giant, has multiple business segments including financing, asset management, trading and even mining.
Last May, the company announced it would buy BitGo, one of the largest custodians of digital assets, for $1.2 billion in stock and cash.
However, Galaxy Digital announced in an updated statement yesterday (15) that it had abandoned its plan to acquire BitGo, stating that it had exercised its right to terminate the acquisition agreement because BitGo had failed to deliver its 2021 audited financial statements in compliance with the requirements of our agreement by July 31, 2022.
There is no need to pay any fees related to termination.
“Galaxy remains well positioned for success and is taking advantage of strategic opportunities to grow in a sustainable way,” Galaxy Chief Executive Mike Novogratz said in a statement.
We are committed to remaining listed in the United States and providing excellent service to our customers.
Truly make Galaxy a one-stop solution for organizations.
But in response to Galaxy Digital’s intention to quit, BitGo said today (16) that Galaxy Digital’s behavior was inappropriate and that it plans to pursue legal liabilities against the company and seek a breakup fee of more than $100 million.
“The attempt by Mike Novogratz and Galaxy Digital to blame BitGo for the termination is ridiculous…
To date, BitGo has met its obligations, including the delivery of its audited financials.
Either Galaxy will pay BitGo a $100 million termination fee as promised, or it will face even more damages for acting in bad faith.
Related to Galaxy Digital’s slide?
At present, the two sides of the takeover dispute say their own words, still in Rashomon.
But Galaxy Digital is awaiting SEC approval for its plan to reorganize as a Delaware company, which, if successful, would allow the company to list on Nasdaq in addition to its existing Toronto Stock Exchange listing.
Under the terms of last year’s deal, BitGo shareholders will receive 33.8 million additional shares of Galaxy Digital common stock and about $265 million in cash.
But with Galaxy’s share price down sharply for more than a year — it has lost nearly 80% of its value since its high late last year — the latest proposed treaty stipulates that BitGo shareholders will now receive 44.8 million newly issued Galaxy shares, giving BitGo shareholders 12% of the combined company instead of the original 10%.
Therefore, some people speculate that the reason why Galaxy Digital stopped the acquisition at this time is that the shares will be further divided after the completion of the merger, which is not conducive to the profit distribution of the company’s listing later. Therefore, it decided to stop the acquisition.
But the exact cause will take time to figure out.
Galaxy Digital shares over the past two years